Buffalo has suffered from a decline in population that started after the second World War, and in 2003 a state oversight authority was established to nurse Buffalo back to fiscal health. Buffalo has worked hard to capitalize on its strengths—location and natural resources—to build a diversified economy based on financial services (three major banks are headquartered there), life science research and services, and high-technology and computer equipment manufacturing. Concurrently, Buffalo has held on to some of its largest traditional employers (automotive parts manufacturers and the flour industry). The emphasis, however, has been on development of the "Byte Belt" of 700 high-tech companies in the region, with the Mayor's Information Technology Council encouraging the growth and sustenance of companies in the area. Buffalo is considered one of the most wired municipalities in the U.S., with extensive fiber optic networks that are attractive to the high-tech entrepreneur.
Situated as it is on the U.S.-Canada border, Buffalo has capitalized on the opportunity for foreign trade since 1988, when a free trade agreement was forged between the two countries. Prior to the tragedies of September 11, 2001, more than 400 foreign-owned manufacturers had established an economic presence there, with Canada a major player and increasing interest being shown by Far Eastern countries such as Japan. At present, homeland security legislation has made it more difficult for companies headquartered outside the U.S. to locate branches in this country.
Western New York is one of the state's centers of high technology and research, and retail sales is a healthy and growing segment of the region's economy. Buffalo is located about 25 miles south of Niagara Falls, one of the world's premier tourist attractions drawing more than 10 million visitors annually. Toronto, Ontario, is less than two hours away from Buffalo. Tourists, shoppers, and theater-goers visiting these popular spots add significantly to Buffalo's economy.
Of increasing importance to the area's economy are the University of Buffalo's two campuses in Buffalo and Amherst, which support more than 50 research centers, some of global importance. The university's technological resources are made available to private industry through its alliance with Insyte Consulting, Inc., part of the Western New York Technology Development Centers network. Generally speaking, Buffalo has been the source of major leaps in research and development, particularly in the life sciences; success stories include creation of the first internal cardiac pacemaker, development of the prostate cancer screening procedure, and Beta-interferon therapy for multiple sclerosis. Between Toronto in Ontario, Canada, and Syracuse, New York, there are approximately 850 companies studying life science issues, researching interventions, and developing products.
Items and goods produced: pharmaceuticals, chemicals, plastics and polymers, automotive components, fabricated metals, industrial machinery, computers, medical instruments, commercial printing, food and food products, aerospace and defense technology
The Buffalo Economic Renaissance Corporation (BERC), a nonprofit entity, was created in 1978 by the City of Buffalo in an effort to create more jobs, recruit and retain growth-industry businesses, and provide a centralized access point for business resources. The BERC staffs three small business support centers in the city of Buffalo, with individual counseling, internet services, fax machines, and other equipment vital to a start-up operation; the BERC also provides excellent information on local incentives.
The U.S.-Canada Free Trade Agreement, which took effect on January 2, 1989, eliminated tariffs and most other trade barriers, laying the groundwork for enhanced competitiveness of both countries in the world marketplace. Buffalo has been ideally situated to benefit from the agreement.
The Erie County Industrial Development Agency (ECIDA) offers local real property tax exemptions in certain industry sectors for new construction or purchase/renovation of an existing facility, a sales tax exemption on construction materials and non-production equipment, and a mortgage recording tax exemption. Qualified industries may be eligible for the county's Payment in Lieu of Tax (PILOT) program. ECIDA also provides assistance for businesses residing within Neighborhood Revitalization/Redevelopment boundaries. The city of Buffalo administers the Commercial Area Revitalization Effort (CARE) as a method of rehabilitating retail and commercial properties in six identified distressed communities in Buffalo. The legs of the program include Operation Facelift (providing an immediate and visible upgrade to the community), the Storefront Facade Program (offering rebates of up to 50 percent of the cost of renovations), and the Security Grant Program (up to 50 percent rebated costs for security system upgrades and installations). Finally, the University at Buffalo has established the Canada/US Trade Center, designed to facilitate the flow of trade between western New York state and southern Ontario, Canada. The center provides marketing analysis and consultation and statistical data for businesses engaging in trade with Canada.
Empire State Development (ESD), the state agency responsible for promoting economic development in New York, has programs available to assist businesses that are expanding and creating jobs. Qualified businesses that locate in an Empire enterprise zone can be exempted from sales tax, benefit from tax reductions, or receive credits on real property and business taxes. Enterprise zone businesses may additionally save money on utilities, receive technical assistance, or receive tax credits on wages for newly-created jobs. Even outside of an Empire Zone, businesses that create new jobs can capitalize on Investment Tax Credits. Companies specializing in research and development are eligible for tax credits on 9 percent of their corporate facility tax and may receive a capital credit for their investment in emerging technologies. Machinery and equipment, facilities, property, fuels, and utilities dedicated to research and development activities may also qualify for sales tax exemptions, and the state operates more than 50 high-tech business incubators to further develop the industry. New York State has additionally partnered with electric and gas utility companies to create the "Power for Jobs" program in which companies that fulfill the requirement of retaining or generating a specified number of jobs then receive a break on their utility costs that can be as much as a 25 percent savings.
Low interest loans can be accessed through the ESD by small manufacturing enterprises, small service operations that are independently owned and operated, businesses located within an Empire zone, businesses located in "highly distressed" areas, businesses owned by women or minorities, defense industry manufacturers, and small businesses seeking to increase their export activities. Other loan programs range from direct financing through the ESD to interest subsidies and loan guarantees. Depending on the financing source, funds can be used for building construction, equipment acquisition, building purchases, and working capital. New York State's progressive tax structure combines tax credits, deductions, exemptions, and write-offs to help reduce the tax burden on businesses.
Federal funding underwrites the Renewal Communities designation of the Buffalo-Lackawanna region, providing tax incentives designed to encourage creation or relocation of businesses in eligible neighborhoods. Benefits include deductions on business expenses that contribute to commercial revitalization, increased deductions on equipment and machinery, federal tax credits for existing and new employees, and a zero percent capital gains rate for qualified businesses. The United States Small Business Association offers benefits to businesses that located within historically underutilized business zones, known as HUBZones.
The Buffalo and Erie County Workforce Development Consortium, Inc., is the umbrella agency for a number of local programs that train and retrain employees. The Buffalo Employment & Training Center (BETC) offers access to national job listings, computer literacy classes, tutorials, counseling, and resume assistance for job seekers. Employers can benefit from BETC's job matching and recruitment programs. The Business Services Division of the Buffalo and Erie County Workforce Development Consortium can customize training programs for businesses, coordinate on-the-job trainings, help transition displaced workers, conduct remedial workshops for basic skills, and assist in tax credit assistance for participating businesses. The Consortium also operates several youth employment centers in the Buffalo area that can offer school-to-work training, aptitude testing, GED preparatory courses, resume development, and counseling. Several area academic institutions offer programs to train and retrain prospective workers and are generally responsive to requests to develop specific programs both on and off campus. Locally, the Center for the Development of Human Services provides skill-building workshops for professionals in the state social services system, and Erie Community College's downtown campus provides retraining and workforce development programs that feature partnerships with local industries. The Buffalo Economic Renaissance Corporation offers targeted training sessions for the entrepreneur.
Health-related industries have become the fuel in Buffalo's economic engine. The Roswell Park Cancer Institute, which works in partnership with the University at Buffalo, is in the process of building a $60 million research facility that will add 170,000 square feet of space in which scientists will study genetics and pharmacology. In the summer of 2005, Contract Pharmaceuticals Limited decided to locate in Buffalo and will be taking over the Bristol-Myers Squibb Company facility. The packager of prescription and over-the-counter medicines will continue to contract with Bristol-Myers. As part of the Queen City Hub plan proposed by the city of Buffalo, $100 million will be poured into the new headquarters of HealthNow New York, a healthcare insurance and referral company.
The Queen City Hub strategic plan being proposed by the city of Buffalo and its economic partners has laid out development projects in five different districts of the downtown area: the Erie Canal Harbor and Waterfront, the new Downtown Education and Public Safety Campus, the Theatre District, the Financial District and Government Center, and the Buffalo Niagara Medical Campus. A primary project on the Erie Canal Harbor waterfront is renovation of the historic Memorial Auditorium, locally known as the "Aud" and reputed to be an eyesore, in an effort to create a massive mixed-use space. Tenants are expected to include specialty stores, a hotel, an Erie Canal heritage museum and interpretive center, and a theme restaurant. The city is proudest of its major committed new tenant and anchor of the space: Bass Pro Shops is a wildly popular outdoor gear retailer that attracts shoppers from miles away with its combination of vast amounts of fishing, hunting, boating, and other equipment along with outdoor education, conservation information, and entertainment.
The proposed Downtown Education and Public Safety Campus is envisioned as a consolidation of the Erie Community College and the Buffalo and Erie County Public Library, plus a newly-constructed Public Safety Campus that will address homeland security and law enforcement in Buffalo and New York State. It is anticipated that the project will cost about $80 million and will produce hundreds of new jobs in the downtown area. On the campus of Buffalo Niagara Medical, the strategic plan calls for another $250 million in research and development facilities, matching the amount expended over the past decade in design and construction of the new Center of Excellence in Bioinformatics and the Hauptman-Woodward Research Center.
Rounding out the Queen City Hub plan will be residential construction projects creating more concentrated and affordable housing, along with supportive retail. Ultimately, the plan will play off the strengths of the radial lay-out of the city as designed by Joseph Ellicot in 1804 and the park system created by Frederick Law Olmsted, linking attractions and drawing people downtown to a safe, pedestrian-friendly zone.
In 2005 the Niagara Falls International Airport is in the process of constructing a $7.4 million Flight Research facility on the grounds of the airport. The eventual tenant will be Veridian Corporation, doing business on behalf of General Dynamics. When completed, the building will be 30,000 square feet containing office and research space in addition to an aircraft modification center and a flight operation center.
Economic Development Information: Buffalo Niagara Partnership, 665 Main Street Suite #200, Buffalo, NY 14203; telephone (716)852-7100; toll-free (800)241-0474
In one day of travel, more than 55 percent of the U.S. population can be reached from Buffalo; approximately 65 percent of Canadians and 70 percent of Canadian manufacturing firms can be accessed within the same span of time. Buffalo is uniquely situated to transport goods by all means, including air, water, rail, and road.
Buffalo's port system maintains specialized grain storage, milling, and processing facilities and is said to rank first in the world in grain handling. The deep-water Port of Buffalo is an important shipping center for manufactured goods from the East Coast. The Welland Canal links the region to the St. Lawrence Seaway. In terms of rail service, Buffalo is one of the nation's largest railroad centers with access to major U.S. and Canadian lines such as CSX, CN, CP, and Norfolk Southern linking the area to points north, south, east, and west.
The Buffalo Niagara International Airport can handle international and domestic air cargo through any of five cargo airlines, including Airborne Express, United Parcel Service, Menlo Forwarding, FedEx, and Superior Cargo Services.
Niagara Falls International Airport, located just outside of Buffalo to the north, offers a Foreign Trade Zone next to the airport, allowing for short-term storage of imported goods without full U.S. Customs scrutiny. Within 90 miles from Buffalo is the Hamilton International Airport-Canadian, which offers customs clearance that is much faster than that available in Toronto, along with an on-site U.S. Customs service. From a sixth to a quarter of U.S.-Canadian trade clears customs at Buffalo.
According to the 2000 U.S. Census, approximately 74.6 percent of Buffalo citizens have achieved a high school degree or its equivalent; an additional 18.3 percent have gone on to earn a bachelor's degree or higher. For the region of western New York State, which includes Buffalo, it's anticipated that manufacturing and production jobs will continue to decline through the year 2012, with a loss of almost 5,000 jobs projected. Transportation and farming employment will remain essentially the same in number, while construction, wholesale and retail trade, food services, education, and healthcare technology, practitioner and support occupations will see growth.
The following is a summary of data regarding the Buffalo-Niagara Falls metropolitan area labor force, 2004 annual averages.
Size of nonagricultural labor force: 547,500
Number of workers employed in . . .
construction and mining: 20,300
trade, transportation, and utilities: 102,000
financial activities: 34,900
professional and business services: 64,100
educational and health services: 84,000
leisure and hospitality: 47,300
other services: 22,900
Average hourly earnings of production workers employed in manufacturing: $17.78 (April 2005)
Unemployment rate: 5.1% (April 2005)
|Number of employees (2004)
|HSBC Bank USA
|Roswell Park Cancer Institute
|American Axle & Manufacturing Inc.
|Buffalo General Hospital
|M & T Bank
|Ford Motor Co.
|National Fuel Gas Co.
|Univera Health Care
|Niagara Mohawk Power Corp.
Buffalo is one of the most affordable areas in the country, leading Forbes.com to rank the city #7 in the nation in regard to cost of living in 2005. Housing costs in the city remain comparatively low for the northeast region, and the real estate value per acre is high. Some experts believe that a real estate market boom will take place within the next 20 years.
The following is a summary of data regarding several key cost of living factors in the Buffalo area.
2004 (3rd Quarter) ACCRA Average Home Price: $230,914
2004 (3rd Quarter) ACCRA Cost of Living Index: 96.3 (U.S. Average = 100.0)
State income tax rate: Ranges from 4.0% to 7.70%
State sales tax rate: 4.0%
Local income tax rate: None
Local sales tax rate: 4.25% (Erie County)
Property tax rate: $37.41 per $1,000 of full valuation; county rate is $4.59 per $1,000 of assessment
Economic Information: Buffalo Niagara Partnership, 665 Main Street Suite #200, Buffalo, NY 14203; telephone (716)852-7100; toll-free (800)241-0474